How Partners React to an Open Innovation Strategy

I have cited Psion Teklogix, provider of rugged mobile computers, several times on my blog for their promising approach to open innovation. Last month, the company took a big step forward with its strategic interpretation of open innovation – called Open Source Mobility (OSM) – when it brought its global partners together for a series of conferences at which they unveiled a new platform designed to give resellers and developer partners the opportunity to co-create with Psion.

How existing partners react to open innovation initiatives is crucial and thus I asked Todd Boone, Psion’s director of Market Development a few questions on this:

In which ways did you prepare to bring your partners on board your open innovation efforts?

Boone: We actually started to bring our partners on board prior to being involved in, or, more accurately, before formally deploying open innovation. By that, I mean that we have had partners developing specific technologies and peripherals on top of our products for many years. Much of the focus is now formalizing the process to do this and expand the network further.

Some of the initial process formalization focused on information flows – sharing information that was previously deemed too confidential to go to partners. Further, we have spent a lot of effort improving the “openness” of our devices – both the interfaces into the devices as well as our development tool kits for both hardware and software. This gives a more comprehensive platform to our partners to develop on, delivered earlier in the product lifecycle. However, there is still much to do in terms of bringing open innovation into the fabric of how we work with partners.

What are the biggest obstacles in getting your partners on board?

Boone: Getting them to understand the full scope of what we are doing. This is understandable because the timing of both change and development within our company dictated the pace and degree to which we could release information. So, it was not until we brought all of our partners together in September that we were able to share the whole message of how we are transforming our processes, our products and our overall focus to support the adoption of open innovation into our business. Now that they fully understand the focus, they are excited about the direction we are headed as a company.

To our partners, it is critical to communicate the message that open innovation is not just a Psion initiative, but rather an industry phenomenon. Further, they need to understand that opening up our business provides an opportunity for them to claim a larger stake of the value equation by developing unique-to-them solution elements that are high value for the customer. This is a critical factor in their ability to win deals in a differentiated way.

What were the biggest surprises or learnings when you started to involve your partners in this?

Boone: How positive their reaction was. As we worked on this in the background, there was a degree of concern about how it would resonate with partners. Of course we had shared the full story with a handful of partners for feedback and we had done a lot of general partner research, but it was not until we shared the message with the entire partner community that we could see the true positive reaction.

Also, enabling partners to fundamentally increase their stake in the value equation did not necessarily mean that they would want to. But many are realizing that they can break out of a commoditized market with something unique. The message to customers is that they have access to solutions that better meet their needs. As one partner said, this makes them feel more like “a part of the family.” Or, as another stated on our open innovation Web platform, IngenuityWorking.com, we now have a cohesive strategy that “goes beyond a mere reseller agreement.”

I think our biggest surprise was the degree to which partners did want to be a part of this. Just as our OSM allows us to differentiate in the market, it also enables our partners to differentiate. Collectively, we are offering a more compelling choice to customers who get to tailor solutions to what they really need – not just what’s being offered. So, even though it may require some investment from many of our partners, they understand that they are investing in true differentiation.

Finally, they also see the opportunity for cross-pollination within the partner community. This is critical because not all partners are interested in developing unique technologies despite the tools we have created, or their focus is in a specific area. However, by augmenting the open innovation initiative with our collaborative community, we have also created the ability for solutions/technologies to be shared across partners, across regions. This expands the market for those that do pursue development initiatives and provides more options for those that don’t.

Other challenges?

As we can extract from Todd Boone, some of the key challenges in bringing existing partners onboard include opening up the information flow, making open innovation a systemic process and successfully explaining the full scope. I think many companies can relate to this, but there are other challenges on this.

I agree with the cross pollination aspect of what you said. Open systems allow for multitude interpretations and the end result can be more robust because of it. I think this taken for granted.

I also agree most companies given a choice would like to participate, however, how the IP generated is managed is more the concern than either or. For example, the problems tends to occur when someone else disproportionally benefits from the contribution made.